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"We want to sell furniture like jewelry," Che Jianxin, chairman of Red Star Macalline, was once full of confidence. However, when the housing market is down and the financial crisis is coming, this rhetoric also looks pale. A few days ago, some media reported that 70% of the merchants of Red Star Macalline faced losses, which could not help triggering the industry to think about the key reasons. In the industry, the Red Star Macalline, which is known as the industry leader, can still "keep the hearts of merchants" and explore where the home brand is going. Red Star Macalline firmly denied this claim. Manager Wang Wei said in an interview with this newspaper reporter, “In fact, the sales of our malls have increased by 40% nationwide this year compared to last year, and Shanghai has also increased to a certain extent. There is no loss of most merchants.†Red Star Mackay The "Merchant Door" incident in Long also brought the problems currently faced by home stores to the surface.
Too expensive rents cause a crisis?
The luxurious facilities and high operating costs of Red Star Macalline are transferred to rent and other expenses, and the cost of settlement is high. The reporter learned that in Red Star Macalline, the rent of certain stalls has reached more than 200 yuan per square meter per month The distributors of products often complain that the rents are too high, and they can only spread the rents to the commodities through price increases, making their prices increasingly uncompetitive. Some merchants calculated an account for the reporter. With a store size of 200 square meters, according to the current rental status of Red Star Macalline, the merchant must have a monthly sales of more than 250,000 and a gross profit of 35% to be basically flat without loss. "20% rent, 10% transportation, distribution, installation fees, 5% staff salaries, commission fees have constituted 35% of gross profit, excluding taxes, finance, management and other expenses, under the current market conditions, It is actually not easy to achieve this sales. Sometimes in order to achieve sales, you can only cut profits and sell them at low prices, but even this is the same loss. "
According to industry insiders, a large number of merchants have already made requests to the management department of the Red Star Macalline shopping mall to reduce rents or withdraw from the market. In this regard, Red Star Macalline firmly denied it and refused to comment on the rent reduction. Wang Wei said that the rent of Red Star Macalline is not the highest. "The rent of a shopping mall in Shanghai has reached 400 yuan per square meter per month. In fact, the level of rent does not become a major factor in whether merchants lose money. The more important thing is to look at Sales per square meter. "
At present, Shanghai home furnishing stores generally formulate corresponding rent prices (1169.50, 0.70, 0.06%) according to the location of shops, with rents ranging from one hundred to four hundred. This year, although the sales of some home stores have dropped by 20% to 30%, the rent has never been adjusted, but facing the grim situation of this year, the industry has been unable to withstand the high rents.
Surplus stores become industry phenomena
From the 300,000-square-meter Red Star Macalline Global Home Design Expo Center to the 180,000-square-meter Red Star Macalline Global Home Lifestyle Plaza, luxury projects with a total investment of up to 2.5 billion yuan have given Shanghai merchants high hopes. However, in recent days, when the reporter visited, it was found that there are few people in the home store, and many booths are posted with promotional information, but not much has been asked. At the same time, many stores are vacant. Red Star Macalline did not deny the existence of vacant storefronts, and explained that “it is normal for brands to enter and exit shopping malls.â€
Relevant personnel of the Shanghai Furniture Industry Association believe that the rapid expansion of furniture stores in recent years has led to a situation of oversupply, which is also one of the reasons for the decline in sales of Shanghai stores. A piece of data from the Shanghai Furniture Industry Association shows that in the past two years, the increase rate of various super-large stores that mainly focus on furniture sales has reached 20% to 30%. As of now, the area of ​​Shanghai furniture stores has reached 2.8 million Square meters. According to industry sources, at present, the vacancy rate of Red Star Macalline's shops is close to 20%.
Nevertheless, Red Star Macalline did not intend to suspend expansion. Che Jianxin said in an interview with the media not long ago, "By 2020, 200 home stores will be built to build the world commercial brand of the Chinese nation and strive to enter the world's top 500."
The expansion of the store leads to the "follow-up" of brand merchants. They follow the store and keep opening new stores, hoping to take the lead. On the one hand, it is desperately expanding, while on the other hand, sales are declining. At present, the average profit margin of the entire furniture industry is only about 3%. If you are not careful, the merchants will lose money. At the same time, the rapid expansion of home furnishing stores has also brought many problems to itself. At present, Red Star Macalline frequently changes coaches, and the internal adjustment of a wide range of job transfers has also caused the industry to have many conjectures about its internal management issues.
Recently, there are more media reports that the industry is also introducing stocks of Red Star Macalline Home Furnishing Chain Group, and the fund of Warburg Pincus, which has acquired a 20% stake in Red Star Macalline, plans to inject $ 200 million in Red Star Macalline. So far, it has not been fully put in place, which makes people doubt whether Red Star Macalline's capital chain is tight, and it also doubts whether its plan to quickly distribute stores across the country can be realized.
Low-cost marketing as a collective behavior
With the same positioning, high overlap rate of investment brands, promotion methods and promotional activities, what kind of special attraction can this furniture store bring to consumers? In the sluggish market situation, merchants have higher requirements for store marketing. Red Star Macalline's large-scale profit promotion for a long time has caused dissatisfaction with the merchants who entered it. An anonymity merchant said that low-cost marketing makes it difficult for furniture brands to survive, and at the same time, too low prices also allow consumers to the industry Integrity raises questions-"Is the furniture profit so high?" "Blindly expanding, wantonly bargaining, vicious competition, if you hit the market in this way, then the life span is definitely short."
Faced with doubts, Che Jianxin said in an interview with the media a few days ago that there is no way to lower prices now. It is through promotion to attract consumers to advance consumption, turning the off-season into a peak season, rather than letting them "hold money for purchase". "To stimulate consumption, this is the first thing we have to do."
For low-cost marketing, the industry generally believes that it is not a "healthy move." "This is often the case in many industries in China. This industry has not waited until it matures and has entered into fierce competition. This low-level, high-intensity competition is called incomplete market economy in management terms. In such cases The industry is always at a relatively low level of competition. "For the current home furnishing industry, long-term extensive development has led to a reduction in the market access threshold, and various uneven products are mixed in the market, but" "Winter" for powerful brand enterprises, but the opportunity is greater than the challenge. At the same time, many people in the industry have pointed out how to make changes in the furniture market. Mismanagement, accurate positioning, avoiding homogeneous competition and branded operation may be the best way for businesses to survive in the future.
Self-salvation becomes a trend
The crisis continues, and pessimism is still spreading. In the face of the harsh market environment, many stores in Shanghai began to actively seek "a cure for the market." Yuexing Group has announced that it has invested 180 million to launch the "Xingshi" operation, launched five major measures such as injecting capital into difficult factories, and carrying out various forms of rewards to consumers. It is expected to stir up the domestic home furnishing market. Ding Zuohong, chairman of Yuexing Group, revealed that 180 million yuan is only the first step in Yuexing's "Xingshi" plan. In order to stimulate more consumers, Yuexing may further increase the breadth and intensity of the "Xingshi".
In addition, Jian Peilong, which has always attracted brand merchants with low rents, has spared no effort in dealing with the cold winter. Its chairman Zheng Liangxian recently announced that he will directly rebate 50% of the rental income of the malls to consumers, and at the same time vigorously advocate honesty and business development In order to drive sales and support the settled manufacturers. At the same time, Jinsheng Household said in an interview with reporters that they are also brewing positive measures to deal with the "cold winter" of the market.
Although the industry is not optimistic about the home market next year, the positive actions of many stores have allowed furniture manufacturers to see the industry's hope. In addition to requiring stores to reduce rents and reduce costs, furniture manufacturers are also looking for corresponding countermeasures, or channel construction, or expand the site against the trend, or hold cultural festivals to add value to the brand value, and prepare for a long-term battle, whether it is a home store or It has become a trend for brand manufacturers to carry out self-salvation.
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